If your estate includes IP, consider these planning strategies

Normally businesses must furnish certain information returns to workers and submit them to the federal government by January 31. But this year, that date falls on a Saturday. So the deadline is the next business day, which happens to be Groundhog Day: February 2, 2026. W-2s for employees By February 2, employers must furnish and/or file these 2025 forms: Form W-2, Wage and Tax Statement. Form W-2 shows the wages paid and taxes withheld for the year for each employee. It must be furnished to employees and filed with the Social Security Administration (SSA). The IRS notes that “because employees’ Social Security and Medicare benefits are computed based on information on Form W-2, it’s very important to prepare Form W-2 correctly and timely.” Form W-3, Transmittal of Wage and Tax Statements. Anyone required to file Form W-2 must also file Form W-3 to transmit Copy A of Form W-2 to the SSA. The totals for amounts reported on related employment tax forms (Form 941, Form 943, Form 944 or Schedule H) for the year should agree with the amounts reported on Form W-3. 1099-NECs for independent contractors The February 2 deadline also applies to Form 1099-NEC, Nonemployee Compensation. This form generally must be furnished to independent contractors and filed with the IRS if the following conditions are met: You made a payment to someone who wasn’t your employee, The payment was for services in the course of your trade or business, The payment was to an individual, partnership, estate, or, in some cases, a corporation, and You made total payments of at least $600 to the recipient during the year. You may have heard that the One Big Beautiful Bill Act, signed into law in 2025, increased the threshold to $2,000. That change goes into effect for payments made this year (that will be reported on the 2026 1099-NECs you’ll furnish and file in early 2027). The threshold will be annually adjusted for inflation beginning in 2027. Other forms Your business may also have to furnish a Form 1099-MISC to each person to whom you made certain payments for rent, medical expenses, prizes and awards, attorney’s services, and more. The deadline for furnishing Forms 1099-MISC to recipients is also February 2. The deadline for submitting these forms to the IRS depends on the filing method. If you’re filing on paper, the 2026 deadline is March 2 (because the normal February 28 deadline falls on a Saturday this year). If you’re filing them electronically, the deadline is March 31. Furnish and file on time When the IRS requires you to “furnish” a form to a recipient, it can be done in person, electronically or by first-class mail to the recipient’s last known address. If 2025 W-2 or 1099-NEC forms are mailed, they must be postmarked by February 2. Don’t cast a shadow over tax filing season by missing the Groundhog Day deadline. Failing to meet applicable deadlines (or include the correct information on the forms) may result in penalties. Contact us with any questions about Form W-2, Form 1099-NEC or other tax forms and the applicable filing requirements. We’d be happy to answer them and help you stay in compliance. © 2026 

To help make sure you don’t miss any important 2026 deadlines, we’re providing this summary of when various tax-related forms, payments and other actions are due. Please review the calendar and let us know if you have any questions about the deadlines or would like assistance meeting them. February 2 Businesses: Provide Form 1098, Form 1099-MISC (except for those with a February 17 deadline), Form 1099-NEC and Form W-2G to recipients. Employers: Provide 2025 Form W-2 to employees. Employers: Report Social Security and Medicare taxes and income tax withholding for fourth quarter 2025 (Form 941) if all associated taxes due weren’t deposited on time and in full. Employers: File a 2025 return for federal unemployment taxes (Form 940) and pay tax due if all associated taxes due weren’t deposited on time and in full. Employers: File 2025 Form W-2 (Copy A) and transmittal Form W-3 with the Social Security Administration. Individuals: File a 2025 income tax return (Form 1040 or Form 1040-SR) and pay any tax due to avoid penalties for underpaying the January 15 installment of estimated taxes. February 10 Employers: Report Social Security and Medicare taxes and income tax withholding for fourth quarter 2025 (Form 941) if all associated taxes due were deposited on time and in full. Employers: File a 2025 return for federal unemployment taxes (Form 940) if all associated taxes due were deposited on time and in full. Individuals: Report January tip income of $20 or more to employers (Form 4070). February 17 Businesses: Provide Form 1099-B, 1099-S and certain Forms 1099-MISC (those in which payments in Box 8 or Box 10 are being reported) to recipients. Employers: Deposit Social Security, Medicare and withheld income taxes for January if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for January if the monthly deposit rule applies. Individuals: File a new Form W-4 to continue exemption for another year if you claimed exemption from federal income tax withholding in 2025. March 2 Businesses: File Form 1098, Form 1099 (other than those with a February 2 deadline), Form W-2G and transmittal Form 1096 for interest, dividends and miscellaneous payments made during 2025. (Electronic filers can defer filing to March 31.) March 10 Individuals: Report February tip income of $20 or more to employers (Form 4070). March 16 Calendar-year partnerships: File a 2025 income tax return (Form 1065 or Form 1065-B) and provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1 — or request an automatic six-month extension (Form 7004). Calendar-year S corporations: File a 2025 income tax return (Form 1120-S) and provide each shareholder with a copy of Schedule K-1 (Form 1120-S) or a substitute Schedule K-1 — or file for an automatic six-month extension (Form 7004). Pay any tax due. Employers: Deposit Social Security, Medicare and withheld income taxes for February if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for February if the monthly deposit rule applies. March 31 Employers: Electronically file 2025 Form 1097, Form 1098, Form 1099 (other than those with an earlier deadline) and Form W-2G. April 10 Individuals: Report March tip income of $20 or more to employers (Form 4070). April 15 Calendar-year corporations: File a 2025 income tax return (Form 1120) or file for an automatic six-month extension (Form 7004). Pay any tax due. Calendar-year corporations: Pay the first installment of 2026 estimated income taxes and complete Form 1120-W for the corporation’s records. Calendar-year trusts and estates: File a 2025 income tax return (Form 1041) or file for an automatic five-and-a-half-month extension (six-month extension for bankruptcy estates) (Form 7004). Pay any tax due. Employers: Deposit Social Security, Medicare and withheld income taxes for March if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for March if the monthly deposit rule applies. Household employers: File Schedule H, if wages paid equal $2,800 or more in 2025 and Form 1040 isn’t required to be filed. For those filing Form 1040, Schedule H is to be submitted with the return and is thus extended to the due date of the return. Individuals: File a 2025 income tax return (Form 1040 or Form 1040-SR) or file for an automatic six-month extension (Form 4868). (Taxpayers who live outside the United States and Puerto Rico or serve in the military outside these two locations are allowed an automatic two-month extension without requesting one.) Pay any tax due. Individuals: Pay the first installment of 2026 estimated taxes (Form 1040-ES) if not paying income tax through withholding or not paying sufficient income tax through withholding. Individuals: Make 2025 contributions to a traditional IRA or Roth IRA (even if a 2025 income tax return extension is filed). Individuals: Make 2025 contributions to a SEP or certain other retirement plans (unless a 2025 income tax return extension is filed). Individuals: File a 2025 gift tax return (Form 709), if applicable, or file for an automatic six-month extension (Form 8892). Pay any gift tax due. File for an automatic six-month extension (Form 4868) to extend both Form 1040 and Form 709 if no gift tax is due. April 30 Employers: Report Social Security and Medicare taxes and income tax withholding for first quarter 2026 (Form 941) and pay any tax due if all associated taxes due weren’t deposited on time and in full. May 11 Employers: Report Social Security and Medicare taxes and income tax withholding for first quarter 2026 (Form 941) if all associated taxes due were deposited on time and in full. Individuals: Report April tip income of $20 or more to employers (Form 4070). May 15 Calendar-year exempt organizations: File a 2025 information return (Form 990, Form 990-EZ or Form 990-PF) or file for an automatic six-month extension (Form 8868). Pay any tax due. Calendar-year small exempt organizations (with gross receipts normally of $50,000 or less): File a 2025 e-Postcard (Form 990-N) if not filing Form 990 or Form 990-EZ. Employers: Deposit Social Security, Medicare and withheld income taxes for April if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for April if the monthly deposit rule applies. June 10 Individuals: Report May tip income of $20 or more to employers (Form 4070). June 15 Calendar-year corporations: Pay the second installment of 2026 estimated income taxes and complete Form 1120-W for the corporation’s records. Employers: Deposit Social Security, Medicare and withheld income taxes for May if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for May if the monthly deposit rule applies. Individuals: File a 2025 individual income tax return (Form 1040 or Form 1040-SR) or file for a four-month extension (Form 4868) if you live outside the United States and Puerto Rico or you serve in the military outside those two locations. Pay any tax, interest and penalties due. Individuals: Pay the second installment of 2026 estimated taxes (Form 1040-ES) if not paying income tax through withholding or not paying sufficient income tax through withholding. July 10 Individuals: Report June tip income of $20 or more to employers (Form 4070). July 15 Employers: Deposit Social Security, Medicare and withheld income taxes for June if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for June if the monthly deposit rule applies. July 31 Employers: Report Social Security and Medicare taxes and income tax withholding for second quarter 2026 (Form 941) and pay any tax due if all associated taxes due weren’t deposited on time and in full. Employers: File a 2025 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or request an extension. August 10 Employers: Report Social Security and Medicare taxes and income tax withholding for second quarter 2026 (Form 941) if all associated taxes due were deposited on time and in full. Individuals: Report July tip income of $20 or more to employers (Form 4070). August 17 Employers: Deposit Social Security, Medicare and withheld income taxes for July if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for July if the monthly deposit rule applies. September 10 Individuals: Report August tip income of $20 or more to employers (Form 4070). September 15 Calendar-year corporations: Pay the third installment of 2026 estimated income taxes and complete Form 1120-W for the corporation’s records. Calendar-year partnerships: File a 2025 income tax return (Form 1065 or Form 1065-B) and provide each partner with a copy of Schedule K-1 (Form 1065) or a substitute Schedule K-1 if an automatic six-month extension was filed. Calendar-year S corporations: File a 2025 income tax return (Form 1120-S) and provide each shareholder with a copy of Schedule K-1 (Form 1120-S) or a substitute Schedule K-1 if an automatic six-month extension was filed. Pay any tax, interest and penalties due. Calendar-year S corporations: Make contributions for 2025 to certain employer-sponsored retirement plans if an automatic six-month extension was filed. Employers: Deposit Social Security, Medicare and withheld income taxes for August if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for August if the monthly deposit rule applies. Individuals: Pay the third installment of 2026 estimated taxes (Form 1040-ES), if not paying income tax through withholding or not paying sufficient income tax through withholding. September 30 Calendar-year trusts and estates: File a 2025 income tax return (Form 1041) if an automatic five-and-a-half-month extension was filed. Pay any tax, interest and penalties due. October 13 Individuals: Report September tip income of $20 or more to employers (Form 4070). October 15 Calendar-year bankruptcy estates: File a 2025 income tax return (Form 1041) if an automatic six-month extension was filed. Pay any tax, interest and penalties due. Calendar-year C corporations: File a 2025 income tax return (Form 1120) if an automatic six-month extension was filed and pay any tax, interest and penalties due. Calendar-year C corporations: Make contributions for 2025 to certain employer-sponsored retirement plans if an automatic six-month extension was filed. Employers: Deposit Social Security, Medicare and withheld income taxes for September if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for September if the monthly deposit rule applies. Individuals: File a 2025 income tax return (Form 1040 or Form 1040-SR) if an automatic six-month extension was filed (or if an automatic four-month extension was filed by a taxpayer living outside the United States and Puerto Rico or serving in the military outside those two locations). Pay any tax, interest and penalties due. Individuals: Make contributions for 2025 to certain existing retirement plans or establish and contribute to a SEP for 2025 if an automatic six-month extension was filed. Individuals: File a 2025 gift tax return (Form 709), if applicable, and pay any tax, interest and penalties due if an automatic six-month extension was filed. November 2 Employers: Report Social Security and Medicare taxes and income tax withholding for third quarter 2026 (Form 941) and pay any tax due if all associated taxes due weren’t deposited on time and in full. November 10 Employers: Report Social Security and Medicare taxes and income tax withholding for third quarter 2026 (Form 941) if all associated taxes due were deposited on time and in full. Individuals: Report October tip income of $20 or more to employers (Form 4070). November 16 Calendar-year exempt organizations: File a 2025 information return (Form 990, Form 990-EZ or Form 990-PF) if a six-month extension was filed. Pay any tax, interest and penalties due. Employers: Deposit Social Security, Medicare and withheld income taxes for October if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for October if the monthly deposit rule applies. December 10 Individuals: Report November tip income of $20 or more to employers (Form 4070). December 15 Calendar-year corporations: Pay the fourth installment of 2026 estimated income taxes and complete Form 1120-W for the corporation’s records. Employers: Deposit Social Security, Medicare and withheld income taxes for November if the monthly deposit rule applies. Employers: Deposit nonpayroll withheld income tax for November if the monthly deposit rule applies. © 2026 

It’s not uncommon for family members to contest a loved one’s will or challenge other estate planning documents. But you can take steps now to minimize the likelihood of such challenges after your death and protect both your wishes and your legacy. Family disputes often arise not from legal flaws, but from confusion, surprise or perceived unfairness. By preparing a well-structured estate plan and clearly communicating your intentions to loved ones, you can reduce the risk of misunderstandings that can lead to challenges. There are also specific steps you can take to help fortify your plan against challenges. Demonstrate a lack of undue influence Family members might challenge your will by claiming that someone asserted undue influence over you. This essentially means the person influenced you to make estate planning decisions that would benefit him or her but that were inconsistent with your true wishes. A certain level of influence over your final decisions is permissible. For example, there’s generally nothing wrong with a daughter encouraging her father to leave her the family vacation home. But if the father is in a vulnerable position — perhaps he’s ill or frail and the daughter is his caregiver — a court might find that he was susceptible to the daughter improperly influencing him to change his will. There are many techniques you can use to demonstrate the lack of any undue influence over your estate planning decisions, including: Choosing reliable witnesses. These should be people you expect to be available and willing to attest to your testamentary capacity and freedom from undue influence years or even decades down the road. Videotaping the execution of your will. This provides an opportunity to explain the reasoning for any atypical aspects of your estate plan and can help refute claims of undue influence (or lack of testamentary capacity). Be aware, however, that this technique can backfire if your discomfort with the recording process is mistaken for duress or confusion. In addition, it can be to your benefit to have a medical practitioner conduct a mental examination or attest to your competence at or near the time you execute your will. Follow the law for proper execution Never open the door for someone to contest your will on the grounds that it wasn’t executed properly. Be sure to follow applicable state laws to the letter. Typically, that means signing your will in front of two witnesses and having your signature notarized. Be aware that laws vary from state to state, and an increasing number of states are permitting electronic wills. Consider a no-contest clause If your net worth is high, a no-contest clause can act as a deterrent against an estate plan challenge. Most, but not all, states permit the use of no-contest clauses. In a nutshell, a no-contest clause will essentially disinherit any beneficiary who unsuccessfully challenges your will. For this strategy to be effective, you must leave heirs an inheritance that’s large enough that forfeiting it would be a disincentive to bringing a challenge. An heir who receives nothing has nothing to lose by challenging your plan. Be proactive now to avoid challenges later Other aspects of your estate plan, such as trusts and beneficiary designations for retirement plans and life insurance, could also be challenged. Taking steps now to minimize the risk of successful challenges to any of your estate planning documents can help protect your legacy and provide clarity and peace of mind for your loved ones. We can help you draft an estate plan that will meet legal requirements and accurately reflect your intentions, reducing the risk of challenges. © 2026 

Admit it, you’ve Googled your own name once or twice. The question is, how frequently do you Google your company’s name? Regularly checking online information about your business can help you manage any negative accounts and dispute false or misleading data. After all, many investors, lenders, customers, vendors and business partners will search your company’s online reputation before deciding to work with you. This may seem unfair, but you’re generally free to screen other businesses for “adverse media” — including allegations of unethical or illegal activities — and you should. Performing such due diligence is critical to protecting your company from nonpayers, fraud perpetrators and those bent on frivolous litigation. Formal policy Given the vast amount of data available online and the potential legal risks, conducting adverse media screening requires a careful, methodical approach. Start by developing a formal policy to guide you. The policy should assist you in finding and using adverse media without triggering legal exposure. Among other things, it should identify sources you intend to access, clarify off-limit actions and detail how you plan to use any negative information you’ve found. Because laws governing privacy, defamation, and discrimination can vary by jurisdiction and situation, ask your attorney to review the policy before rolling it out. Reliable data Adverse media screening can cover a broad range of activities. So you should create categories to consistently classify potential red flags. Examples might include: Civil proceedings, Criminal misconduct, Environmental violations, Regulatory scrutiny, and Financial crimes. Classifying data by category can help focus your due diligence efforts and make it easier to identify the most reliable sources for each. Keep in mind that to generate traffic, some online outlets do little to verify the accuracy of their stories — and may even knowingly post disinformation. For example, many social media platforms allow their users to post opinions that may be factually incorrect. Rely only on information providers with high ethical standards and established histories of accurate reporting. And for any accusation, seek corroboration from multiple sources. AI tools You don’t have to conduct adverse media screening manually. Rather than asking employees to research and gather information, some businesses use software that relies on artificial intelligence (AI) to scan the internet. AI can analyze large volumes of data far more efficiently than manual methods. However, buying such tools can require a substantial investment and may not be practical for smaller businesses. The scope of screening should be proportional to the size of your business, the nature of the relationships you’re evaluating and the level of risk involved. Multistep process However extensive your adverse media screening, remember that it’s only one part of a broader due diligence process. If you uncover something negative, ask your potential business partner to explain it. There may be an innocent — or at least, more nuanced — explanation. Also ask for references and follow up on them. Adverse media screening can involve legal, operational and cost considerations, so work with your legal and financial advisors to determine when screening is warranted, how extensive it should be and how to control related costs. Contact us for more information. © 2026 

If you had significant medical expenses last year, you may be wondering what you can deduct on your 2025 income tax return. Income-based thresholds and other rules can make it hard to claim the medical expense deduction. At the same time, more types of expenses may be eligible than you might expect. Limits on the deduction Medical expenses are deductible only if they weren’t reimbursable by insurance or paid via tax-advantaged accounts (such as Flexible Spending Accounts or Health Savings Accounts). In addition, they’re deductible only to the extent that, in aggregate, they exceed 7.5% of your adjusted gross income (AGI). For example, if your 2025 AGI was $100,000, your eligible medical expenses during the year would have to total more than $7,500 for you to claim the deduction — and only the amount in excess of that floor would be deductible. If you had $10,000 in eligible expenses, your potential deduction would be $2,500. In addition, medical expenses are deductible only if you itemize deductions. For itemizing to be beneficial, your itemized deductions must exceed your standard deduction. Due to changes under the Tax Cuts and Jobs Act that were made permanent by last year’s One Big Beautiful Bill Act (OBBBA), many taxpayers no longer itemize. However, some taxpayers who hadn’t been itemizing recently may benefit from itemizing for 2025 because of the OBBBA’s quadrupling of the state and local tax deduction limit. If you fall into that category, you should also revisit whether you can benefit from the medical expense deduction on your 2025 income tax return. What expenses are eligible? If you do expect to itemize deductions on your 2025 income tax return, now is a good time to review your medical expenses for the year and see if you had enough to exceed the 7.5% of AGI floor. Eligible expenses include many costs besides hospital and doctor bills. Here are some other types of expenses you may have had in 2025 that could be deductible: Transportation. The cost of getting to and from medical treatment is an eligible expense. This includes taxi fares, public transportation or using your own vehicle. Your vehicle costs can be calculated at 21 cents per mile for medical miles driven in 2025, plus tolls and parking. Alternatively, you can deduct certain actual vehicle-related costs, including gas and oil, but not general costs such as insurance, depreciation and maintenance. Insurance premiums. The cost of health insurance is a medical expense that can total thousands of dollars a year. Even if your employer provides you with coverage, you can deduct the portion of the premiums you paid — as long as it wasn’t paid pretax out of your paychecks. Long-term care insurance premiums also qualify, subject to dollar limits based on age. Here are the 2025 limits: 40 and under: $480 41 to 50: $900 51 to 60: $1,800 61 to 70: $4,810 Over 70: $6,020 Therapists and nurses. Services provided by individuals other than physicians can qualify if they relate to a medical condition and aren’t for general health. For example, the cost of physical therapy after knee surgery qualifies, but the cost of a personal trainer to help you get in shape doesn’t. Also qualifying are amounts paid for acupuncture and those paid to a psychologist for medical care. In addition, certain long-term care services required by chronically ill individuals are eligible. Eyeglasses, hearing aids, dental work and prescriptions. Deductible expenses include the cost of glasses, contacts, hearing aids, dentures and most dental work. Purely cosmetic expenses (such as teeth whitening) don’t qualify, but certain medically necessary cosmetic surgery is deductible. Prescription drugs qualify, but nonprescription drugs such as aspirin don’t, even if a physician recommends them. Smoking-cessation programs. Amounts paid to participate in a smoking-cessation program and for prescribed drugs designed to alleviate nicotine withdrawal are deductible expenses. However, nonprescription gum and certain nicotine patches aren’t. Weight-loss programs. A weight-loss program is a deductible expense if undertaken as treatment for a disease diagnosed by a physician. This could be obesity or another disease, such as hypertension, for which a doctor directs you to lose weight. It’s a good idea to get a written diagnosis. In these cases, deductible expenses include fees paid to join a weight-loss program and attend meetings. However, foods for a weight-loss program generally aren’t deductible. Dependents and others. You can deduct the medical expenses you pay for dependents, such as your children. Additionally, you may be able to deduct medical expenses you pay for an individual, such as a parent or grandparent, who would qualify as your dependent except that he or she has too much gross income or files jointly. In most cases, the medical expenses of a child of divorced parents can be claimed by the parent who pays them. Determining if you can benefit After reviewing this list of eligible expenses, do you think you had enough in 2025 to exceed the 7.5% of AGI floor? Or do you have questions about whether specific expenses qualify? Contact us. We can determine if you can benefit from the medical expense deduction — and other tax breaks — on your 2025 income tax return. © 2026 

Do you operate a business as a partnership, a limited liability company (LLC) treated as a partnership for tax purposes or an S corporation? In tax lingo, these are called “pass-through” entities because their taxable income items, tax deductions and tax credits are passed through to their owners and taken into account on the owners’ federal income tax returns. These entities generally don’t owe any federal income tax themselves. Here are some important things to know about tax filing for pass-through entities. March 16 deadline Even though pass-through entities generally don’t owe federal income tax at the entity level, they still must file a federal income tax return. Partnerships and LLCs treated as partnerships for tax purposes file Form 1065, “U.S. Return of Partnership Income.” S corporations file Form 1120-S, “U.S. Income Tax Return for an S Corporation.” If your pass-through entity uses the calendar year for tax purposes, as most do, the deadline for filing the federal income tax return for its 2025 tax year is March 16, 2026 (because March 15 falls on a Sunday). The March 16 deadline can be extended by six months to September 15, 2026, by filing IRS Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” by March 16. Keep in mind that if you file an extension for the pass-through entity’s return, you (and any other owners) will also likely also need to file extensions to October 15, 2026, for your individual 2025 return. Schedules K-1 For each tax year, pass-through entities must send out Schedules K-1 to their owners. These forms report each owner’s share of the entity’s tax items. Schedules K-1 can be sent to owners electronically. And they must be included with the entity’s federal income tax return for the year. Because pass-through entity owners rely on Schedules K-1 to prepare their returns, it’s desirable to get them out as early as possible. However, if an entity’s 2025 return filing deadline is extended to September 15, 2026, that also becomes the deadline for providing Schedules K-1 to the owners. 3 tax law changes to note The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, included several tax changes that will affect 2025 returns of pass-through entities. Here are three of the most important: 1. First-year depreciation. The OBBBA permanently restored 100% first-year depreciation for eligible assets acquired and placed in service after January 19, 2025. Before the OBBBA, 100% bonus depreciation was last allowed for eligible assets placed in service in 2022. For eligible assets placed in service in tax years beginning in 2025, the OBBBA increased the maximum amount that can be immediately deducted via the first-year Section 179 expensing election to $2.5 million (up from $1.25 million before the OBBBA). The deduction begins to phase out dollar for dollar when asset acquisitions for 2025 exceed $4 million (up from $3.13 million before the OBBBA). The OBBBA also established 100% first-year depreciation for nonresidential real estate that’s classified as qualified production property. That basically means factory buildings. 2. R&E expenditures. The OBBBA allows businesses to immediately deduct eligible domestic research and experimental (R&E) expenditures that are paid or incurred in tax years beginning in 2025 and beyond. Before the OBBBA, these expenditures had to be amortized over five years. Eligible small businesses can elect to apply the new immediate deduction rule retroactively to pre-2025 tax years beginning in 2022, 2023 or 2024. Also, all taxpayers that made R&E expenditures in tax years beginning in 2022 through 2024 can elect to write off the remaining unamortized amount of their R&E expenditures over a one-year or two-year period starting with the tax year beginning in 2025. 3. Business interest expense deductions. For tax years beginning in 2025 and beyond, the OBBBA permanently installed more favorable rules for determining how much business interest expense can be currently deducted. While most small and midsize businesses are exempt from the business interest expense deduction limitation rules, check with us regarding the status of your pass-through entity. Time to get rolling The filing deadline for the 2025 federal income tax returns of most pass-through entities is looming. While the deadline can be extended by six months, you must take action by March 16, at minimum, to file for an extension. Contact us to get things rolling. © 2026 

A Crummey trust provides a key tax benefit of an outright gift without some of the downsides. Although the mechanics can seem technical, the concept is straightforward. And the benefits can be significant for families looking to reduce estate taxes and provide long-term financial security. How does a Crummey trust work? A Crummey trust (named after the 1968 court case that first authorized its use) is a special type of trust that allows gifts to it to qualify for the gift tax annual exclusion. Yet unlike with an outright gift, you still determine, through the trust terms, how the assets will be managed and when they’ll ultimately be distributed to beneficiaries. Generally, assets placed in a trust are treated as future interests and, therefore, don’t qualify for the annual exclusion ($19,000 per beneficiary in 2026). So you normally would have to use some of your lifetime gift and estate tax exemption ($15 million for 2026) to make tax-free gifts to a trust. However, a Crummey trust overcomes this limitation by granting beneficiaries a temporary right to withdraw contributions made to it. Here’s how it works: Each time you contribute assets to the trust, the trustee must send a Crummey notice to the trust’s beneficiaries. This notice informs them that they have a limited window — typically 30 to 60 days — to withdraw their shares of the contribution. Because the beneficiaries technically have immediate access to the funds, the IRS treats the gift as a present interest, allowing it to qualify for the annual exclusion. After the withdrawal period expires, the funds remain in the trust (assuming the beneficiaries didn’t exercise their withdrawal rights) and are managed and eventually distributed according to the trust terms, such as when beneficiaries reach specific ages or to fund certain types of expenses. A Crummey trust is an irrevocable trust, meaning once assets are transferred into it, you, the grantor, generally can’t reclaim them. You determine the trust terms when you set up the trust. But, with limited exceptions, you can’t change them after the trust is initially funded. Because the trust is irrevocable, the trust assets won’t be included in your taxable estate, provided all applicable rules are met. This also effectively removes future appreciation on those assets from your taxable estate. When can they be particularly beneficial? Crummey trusts are often used in conjunction with irrevocable life insurance trusts (ILITs). An ILIT owns one or more policies on your life, and it manages and distributes policy proceeds according to your wishes. An ILIT keeps insurance proceeds, which could otherwise be subject to estate tax, out of your estate (and possibly your spouse’s). You aren’t allowed to retain any powers over the policy, such as the right to change the beneficiaries. But the trust can be structured to make a loan to your estate for liquidity needs, such as paying estate tax. Structuring ILITs as Crummey trusts allows annual exclusion gifts to fund the ILIT’s payment of insurance premiums. There’s an incentive for beneficiaries not to exercise their withdrawal rights so that the premiums can be paid to maintain the policy. The trust can potentially provide beneficiaries with a much larger payout later from the life insurance death benefit. Any tax traps? Before using a Crummey trust, it’s important to consider potential tax traps. One involves inadvertent taxable gifts from one beneficiary to another. Suppose, for example, that you set up a trust that provides income for your spouse for life, with any remaining assets passing to your daughter. To take advantage of the annual exclusion, you provide your spouse with Crummey withdrawal rights. Each time your spouse allows these rights to lapse without exercising them, he or she in effect has made a gift to your daughter by increasing the value of her future interest in the trust. There are a couple of ways to avoid this result. One is to rely on the IRS’s “5&5” rule, which doesn’t count lapsing rights as a taxable gift as long as the withdrawal right doesn’t exceed the greater of $5,000 or 5% of the trust’s principal. So long as the trust principal is at least $380,000, you’ll be able to make $19,000 annual gifts without violating the 5&5 rule. Another option is to make the holder of Crummey withdrawal rights the sole beneficiary of the trust, which eliminates the gift tax concern. Need help? While a Crummey trust can be a powerful estate planning tool, it must be properly drafted and administered, including timely notices of withdrawal and careful recordkeeping. If you’re considering a Crummey trust, contact us. We can help ensure this trust type aligns with your broader financial and estate goals. © 2026 

For many employees, mobile phones are no longer a perk — they’re an essential business tool. However, issuing company phones or reimbursing employees for use of their personal devices can create hidden security risks, unexpected tax consequences and productivity concerns for business owners. Here are some key issues to consider before rolling out or revising your company’s mobile phone policy. Security risks In general, the biggest security risk associated with mobile phones is that they may lack robust protections against phishing, malware and other cyberthreats. Hackers could use an employee’s phone to access your business’s IT network, leading to theft of customer payment details, payroll data, intellectual property and other sensitive information. An illicit entry could even result in a ransomware incident. If you allow employees to use phones to access company data, use a mobile device management system that enforces strong security protocols. And instruct phone users to avoid using public Wi-Fi networks (such as those in airports) that could expose them to data interception and malware. Tax rules for work-issued phones Another consideration is taxes. Business use of an employer-provided phone typically is treated as a nontaxable working condition fringe benefit if it’s provided “primarily for noncompensatory business purposes.” For example, you may need to reach employees at any time for work-related emergencies. If the noncompensatory business purposes test is met, the value of any personal use of an employer-provided smartphone will generally be treated as a nontaxable “de minimis” fringe benefit. However, these phones will trigger taxable income if they’re provided to replace compensation, attract new hires or boost staff morale. Guidelines for employee-owned devices The IRS has indicated that it analyzes expense reimbursement for employees’ personal phones similarly to how it treats employer-provided phones. So reimbursements generally won’t be considered additional income or wages if: You have substantial business reasons for requiring employees to use their personal phones and reimbursing them for doing so, Reimbursements are reasonably related to the needs of your operations and calculated not to exceed the expenses that employees typically incur in maintaining their phones, and Reimbursements aren’t made as a substitute for a portion of employees’ regular wages. Employer reimbursements for employees’ actual expenses must usually be made under a so-called accountable plan (contact us for more information). Alternatively, you could provide employees with flat monthly stipends. But stipends that exceed reasonable amounts may be treated as taxable wages. Formal usage policies To protect productivity, it’s critical to create written phone-usage policies. Discourage employees from using company-owned phones or their personal devices to make long personal calls, access their social media accounts or stream non-work-related videos during work hours. If you allow employees to use their own phones at work, be sure to establish a bring-your-own-device (BYOD) policy. In addition to proper usage, it should address such issues as security, data ownership, privacy (for example, your ability to view employee phone data) and proper use. Your BYOD policy might also detail procedures for wiping personal devices when employees leave your employment. Pros and cons Many positions call for the frequent use of mobile phones — your executives, salespeople and other “road warriors” are only a few who probably need them. Depending on the nature of your business, it may make sense to issue or reimburse the use of personal phones as a fringe benefit to other employees. We can help you review the pros and cons related to equipment costs, security, taxes and productivity. © 2026 

Every year, severe storms, flooding, wildfires and other disasters affect millions of taxpayers. Many experience casualty losses from damage to their homes or personal property. The One Big Beautiful Bill Act (OBBBA), signed into law last year, generally made permanent the Tax Cuts and Jobs Act (TCJA) limitation on the personal casualty loss tax deduction. But it also expanded the deduction in one way. What’s deductible For losses incurred from 2018 through 2025, the TCJA generally restricted deductions for personal casualty losses to those due to federally declared disasters. This is the rule that applies to your 2025 income tax return due April 15, 2026. (Before the TCJA, personal casualty losses were also potentially deductible if due to various other types of incidents, such as theft, vandalism and accidents as well as to fires, floods, etc., not attributable to a federally declared disaster.) The OBBBA generally has made the disaster requirement permanent. But, effective January 1, 2026, it expands eligible disasters to include certain state-declared disasters. This applies to the tax return you’ll file next year for 2026. There’s an exception to the general rule, however: If you have personal casualty gains because your insurance proceeds exceed the tax basis of the damaged or destroyed property, you can deduct personal casualty losses that aren’t due to a declared disaster up to the amount of your personal casualty gains. Additional limits Even when the cause of a personal casualty loss qualifies you for the deduction, additional limits apply. First, your deduction for the loss from the declared disaster is reduced by any insurance proceeds received. If insurance covered your entire loss, you can’t claim a casualty loss deduction for that loss. If insurance didn’t cover your entire loss, then $100 (per casualty event) must be subtracted from the uncovered amount. Finally, a 10% of adjusted gross income (AGI) floor applies. So you can deduct only the uncovered loss (reduced by $100 per casualty event) that exceeds 10% of your AGI for the year you claim the loss deduction. If, say, your 2025 AGI is $100,000 and your casualty loss (after subtracting insurance proceeds and $100 per event) is $11,000, you can deduct only $1,000 on your 2025 return. Also keep in mind that you must itemize deductions to claim the casualty loss deduction. Since 2018, fewer people have itemized because the TCJA significantly increased the standard deduction amounts — and the OBBBA has increased them further. For 2025, they’re $15,750 for single filers, $23,625 for heads of households, and $31,500 for married couples filing jointly. For 2026, they’re $16,100, $24,150 and $32,200, respectively. So even if you qualify for a casualty deduction under the rules and limits, you might not get any tax benefit because you don’t have enough total itemized deductions to exceed your standard deduction. Have questions? The rules for the personal casualty loss deduction are complex, so contact us for more information. We can help you determine whether you qualify for — and will benefit from — this deduction on your 2025 income tax return. © 2026